There are short bashers trying to drive the stock down so as to be able to accumulate (buy) shares at the lowest possible cost. Some are involved in the arbritrage of the SUN deal and some are acting independently of the SUN deal.
They are casting dispersions and whining to get holders to sell to them at low prices so they will profit as ETP shares improve in the next couple of years as projects come on line.
Additionally they are mounting short attacks on the shares to manipulate the trading and scare people into selling.
ETP has been expending capital for growth projects that will be coming on line.
Naturally before they come on line, they are a drain on the company as during the building phase, it is just expenditures for building the projects. As the projects come on line, the situation reverses strongly, ie the building costs disappear and are replaced by much smaller maintenance and operation costs, and revenue comes in.
If you go to the company website, look at the right side of page for presentations and click on the September ,4 2012 Barclays CEO power conference link for the PDF file.
On page 17 which is headed as "ANNOUNCED PROJECTS", you will see a column which gives the completion dates of the projects. There are 3 Midstream projects coming on line in the 4th quarter of 2012, and two big NGL projects also coming on line in the same 4th quarter of 2012. (Justtice and West Texas Gateway).
We are almost at that time!
THAT IS WHY SHORT BASHERS ARE WORKING SO HARD NOW, as they realize that once these projects come on line and earnings gradually improve dramatically, it will be too late to as easily sway sentiment against ETP .
Additionally with the closing of the SUN deal expected next month , the short bashers are desperately doing their best to drive the stock down.
I believe it would be stupid to sell now right before the payoff begins to materialize.
pcmountaindog !!! "What do you do to determine it's a pull back and not a long term slide due to trouble ?" (pcmountaindog asks) You need to understand and agree with how a company operates foremost. Next you keep in touch with the sector and economy in general ,i look for opportunities to average down and then sell some off on bumps when the load gets too heavy. I dont mind getting overloaded with a liquid Blue Chip but get nervous with low volume MLP and ETF. I dont mean to bash ETP but i have not achieved a comfort level with them .
I like ETP, will remain long if I believe the dividend is okay which, for now looks solid.
You analysis is what I like to call speculation at best and not something which should be used to make the decision to buy or sell. A discussion of fundamentals is what is proper. Rumor of what is happening with regards to shorts, moving averages, options volume etc has nothing to do with earnings and the possibility of dividends being cut or increased and that is about the only reason to invest in MLPs.
My decision to add to my position will not be affected by short building or covering. That a fast track to no where.
Short term trading of MLPs is a bit foolish.
Mr. mountandog an excellent post. I sold at a loss after last Dividend and will buy back in if price sinks to $36 or stabilises. I was in ETP,STON and NRP and sold all, but ETP was my only loss.
Sorry valueman i have not heard a lot of bashing. Just some people that talk about the continuous price drop. This baby will rise near the next dividend then sink to hades. I thought about getting back in but have not observed any price stability. I dont think the PPS should be called VOLITAL because the price does not ever seem to stabilize.
Really humorous, reading about how this is not a good trading stock, how it is only good for the distributions, and how the PPS does not stabilize. Wow, you folks really need to look at a historical table for your stock. I am talking about ETP. If you all are speaking about some other MLP, I apologize in advance.
Let me illustrate some historical facts that will be difficult for even the most religious zealots to refute:
Over the past 3 years, the avg PPS climb from one month out to EX in the Oct/Nov run has been 3.36/unit. Has not failed to appreciate in price on any of these 30 day runs. Homework assignment for those stating they know their MLP so well:
Check how many Q's, since Dec 2008 have missed, in positive PPS appreciation, one month out to EX, for ETP.
Then once you begin to "see", do you think you can make money with this knowledge? I trade options exclusively(99.9%), and plan on taking advantage of this incredible historical consistency, this October.
Ok, over $3/Q avg over 17 Q's with only two misses in that time. Should I go on. Trading a mere 100 Calls for 30 days on each of those 17 Q's would have been the equivalent of having collected dividends on a portfolio of 17,000 units. The return was $15,000 on the 100 options. The cost each Q, would be a conservative 20,000 for the 100 ITM Calls.
To trade the equivalent units you would need 17,000 x 42.81 = $727,770. That is on one MLP only. I hope to trade CQP, PAA, OKS, ETP and EPD, this Q(Oct to Nov EX...30 days), with a capture of $75,000 for the month on a 100,000 investment. These MLP's have the same, consistent runs as ETP(ck their history). Buy and hold would need approx 3.5 million dollars invested in units to capture the same 75k in distributions.
Not saying to not be a buy and hold, just smiling when I read how terrible these MLP's are to trade......;-)
Here is what I see happening, If you take the original offer of : $ 50.00 in cash, $25.00 and .5245 share of ETP, or 1.0490 share of ETP. Sun has approx. 105MIL shares of common, this is how they arrived at $5.3 billon. $ 50.00 a share times 105MIL = $ 5.3 BIL. I do not think anyone is going to get all cash. At the current price of ETP $25.00 cash & 1/2 share = $ 47.00, the all stock is even worse about $ 44.06 a savings to ETP of about $ 400,000,000 not a bad deal, no wonder their is a law suit. The Sun Directors have been selling their stock recently,what do they know,( injunction to the merger?) All of the Sun employees that had Sun stock in the company 401-K plan are having their stock sold. I'm sure ETP or one of their companies are buying all the can as the stock is unloaded in mass. It is in ETP's best interset to have their shares fall, they get Sun for less than they offered. Sun has $2.0 BIL in cash and service stations worth about $1.75 BIL looks like ETP is getting 1/3 and operating partner of SXL for a discount price. The law suit could put a monkey wrench in the merger plans and force ETP to amend the terms of the merger, however the SEC filing said their was a risk factor in accepting the all stock option,due to price movement. I believe the all stock option is best,since it could be amended higher and once Sun is part of ETP the ETP shares should go higher since the parts of Sun they get will help earnings.
The arbs are definitely driving the stock price down. I think ETP will start raising the distribution next year as distributions start growing again. I therefore tripled my position today. If ETP is looked at by the market as as a distribution grower next year, then the stock could reach between 55 and 59.66 next year which would be a yield of between 6.5% and 6% by my calculations. That would be an increase in the stock of between 32-43% not counting the distribution. I'm more than willing to give it a shot.
NOTE: I bought PAA at 24 in 2002 and EPD between 20 and 32.25 between 2009 and January 2010. So I've been following the MLP space for years.
As long as I keep getting that 8.4% and keep accumulating at fire sale prices, I am happy.
The bashers here obviously have an agenda or they wouldn't waste their time. I don't follow stocks I have no interest in... why should they?
Sentiment: Strong Buy